Know » Business & Economy tagged with ‘economy » Business & Economy’http://www.utexas.edu/know/
Tue, 31 Mar 2015 20:39:22 +0000enhourly1http://wordpress.org/?v=3.2.1Sustaining America’s Food Supply Starts With Taking Back the Mid-Sized Farmshttp://www.utexas.edu/know/2014/10/16/sustaining-america%e2%80%99s-food-supply-starts-with-taking-back-the-mid-sized-farms/
http://www.utexas.edu/know/2014/10/16/sustaining-america%e2%80%99s-food-supply-starts-with-taking-back-the-mid-sized-farms/#commentsThu, 16 Oct 2014 13:42:32 +0000mp35922http://www.utexas.edu/know/?p=36320Thursday, Oct. 16, is World Food Day and the theme this year is “Family Farming: Feeding the World, Caring for the Earth.” This is fitting because 500 million of the world’s 570 million farms, or 88 percent, are family owned, according to the U.N. Food and Agriculture Organization (FAO).

Family farms, the FAO points out, are clearly the best places to look for solutions to hunger, sustainability and biodiversity. And that is exactly what the FAO and other international development organizations are doing: concentrating on helping small-scale farmers — most of which farm on less than 5 acres — especially in Asia, Africa and the Middle East.

Texans and other Americans face a set of different challenges.

Americans are not so much hungry as “food insecure,” meaning they’re malnourished because of imbalanced diets, insufficient vitamins or minerals, and the over-consumption of unhealthy foods. Neither are American family farms small and unproductive.

About 96 percent of American farms are family owned and operated, and family farms account for nearly 85 percent of U.S. agricultural production, with “large” and “very large” family farms providing nearly two-thirds of this production. American farms also get a great deal of support from Congress and the USDA.

Still, the FAO is correct: small and midsize farms in the United States receive far less support than larger farms, with more than half of commodity payments going to the 11 percent of farms earning more than $500,000 a year.

They are also far less profitable than the larger farms, with almost all of the small and very small, or “hobby” farms, relying on nonfarm income and midsize farms vanishing, with well more than 100,000 gone over past decade.

Many family farms in the western states are also unsustainable as they drain rivers, dry up reservoirs and pump out ground water at nonreplenishable rates.

Moreover the midsized farms provide more biodiversity, since larger farms are typified by monoculture, with large plantations of single-variety species of corn, soy, cotton and other commodities, whereas smaller farms tend to plant different kinds of crops and raise different kinds of animals.

Yet it’s the midsize family farms that are especially getting squeezed. They don’t have the scale economies that the larger farms do — whether in buying from corporate suppliers, selling power to food companies, and receiving price supports and other subsidies.

And it’s the midsize farms that constitute the mainstay of rural America. Whereas the larger farms are much more likely to have absentee owners and send their profits out of state, midsize family farms buy and spend locally, with resultant multiplier effects of jobs and income then going to local buyers, local hardware and grocery stories, and others.

So the question then becomes, what kind of rural America do we want?

Agricultural studies from several Midwestern states show that consumers in Minnesota, Illinois and Michigan spend of billions on food annually, but nearly all this money and all of the states’ farm production leave their respective states.

An Illinois state task force found that just a 20 percent increase in local food production, processing, and purchasing would spark $20 billion to $30 billion in new economic activity around the state and create thousands of jobs in Illinois.

To promote the diverse kinds of agriculture that would allow a more diverse and interconnected farm system to develop, policymakers in Illinois, Texas, California and other states need to reconsider what kinds of a rural America they want. Americans pride themselves on having a food system run by family farmers, but the truth is that the midsize farm, the backbone of American farming and country living, is less and less of a reality, and that trend will continue.

If Americans seek productive rural areas where midsize farms thrive and where young families can afford to become full-time farmers, state and national leaders both in and out of government must think creatively about how large, interconnected, and more self-sufficient state and regional markets could be developed.

Bartholomew Sparrow is a professor of government at The University of Texas at Austin who studies the history of U.S. foreign relations and teaches classes on the politics of food in America.

]]>http://www.utexas.edu/know/2014/10/16/sustaining-america%e2%80%99s-food-supply-starts-with-taking-back-the-mid-sized-farms/feed/0Investing in the future of entrepreneurshiphttp://www.utexas.edu/know/2012/05/03/texas_venture_labs/
http://www.utexas.edu/know/2012/05/03/texas_venture_labs/#commentsThu, 03 May 2012 16:41:26 +0000University Communicationshttp://www.utexas.edu/know/?p=25354The Texas Venture Labs at the McCombs School of Business is now the Jon Brumley Texas Venture Labs, in recognition of a combined gift of more than $6 million from Fort Worth businessman and entrepreneur Jon Brumley to fund the growth of the program at The University of Texas at Austin.

“This investment is a game changer that enables us to expand the scale and accessibility of the Texas Venture Labs model. It’s a vote of confidence as well, because of the reputation of Jon Brumley as an entrepreneur, a business builder and a distinguished graduate of McCombs and the Wharton School of Business,” said McCombs Dean Thomas Gilligan.

Jon Brumley has founded six oil and gas companies, all of which listed on the New York Stock Exchange. In 2005 Forbes magazine named Brumley and his son Jonny “Entrepreneurs of the Year.”

Brumley said his gift reflects the reality and the potential of Texas Venture Labs.

“Texas Venture Labs is a gem in the Texas entrepreneurial ecosystem. It provides critical, hands-on experience for aspiring entrepreneurs who learn as students the effort required to get a new venture through the financing process,” he said. “For me, this gift is an opportunity to build our capacity to grow the economy of Texas, while giving a leg up to young entrepreneurs, who remind me a lot of myself at that age.”

Since it started two years ago, Texas Venture Labs has worked with 40 companies that have raised more than $25 million in investment capital, while providing direct entrepreneurial experience to graduate students in business, engineering, law and natural sciences. Texas Venture Labs also sponsors the annual Venture Labs Investment Competition, which is being held this week on campus.

“Our theme for the investment competition is ‘Investor-Ready,’ which reflects why graduate students from around the world flock to Austin every spring for the chance to launch their business as they finish graduate school,” said Rob Adams, director of Texas Venture Labs. “With this generous gift, Jon Brumley has signaled to the entrepreneurial community that Texas Venture Labs is also ‘Investor-Ready.’”

]]>http://www.utexas.edu/know/2012/05/03/texas_venture_labs/feed/0Converting pessimism into hopehttp://www.utexas.edu/know/2012/03/15/weiss_undergraduate_research/
http://www.utexas.edu/know/2012/03/15/weiss_undergraduate_research/#commentsThu, 15 Mar 2012 20:47:11 +0000University Communicationshttp://www.utexas.edu/know/?p=24489It’s not surprising that Ben Weiss was the fall 2011 recipient for the Senate of College Councils Undergraduate Research Grant.

Ben Weiss on the Zimbabwe bridge.

Since arriving at The University of Texas at Austin from New York in August 2009 as a freshman, Weiss has been active as both an academic and an activist. He is a triple major in government, history and the self-created major of African Conflict and Development Studies. Focusing on genocide, HIV/AIDS and economic development in Africa, Weiss aspires to help developing countries become more sustainable and economically prosperous.

To help future thought leaders such as Weiss carry out their research, the Senate of College Councils and the School of Undergraduate Studies created a $1,000 Undergraduate Research Grant. With the grant, Weiss was able to take his research into Zambia, where he examined its rising negotiating power and foreign investment.

We sat down with Weiss to learn more about his Zambia research experience, his interest in economic development, and how he discovered some surprising findings about the country’s economic outlook.

How did Zambia’s debt crisis come about?

Post-1975, Zambia’s economic history can be characterized by a large financial contraction that resulted from the global recession after the 1973 energy crisis. To forestall the effects of this global market crash, Zambia borrowed heavily and rapidly, expanding the country’s national debt.

By 1983, the country’s total external debt was about $3 billion, much of it owed to the World Bank and International Monetary Fund (IMF). Post-independence, Zambia spent much of the Cold War period enacting multiple national development plans to dig the country out of its mounting economic turmoil, but most only exacerbated the problem.

How has Zambia’s economy progressed since the 1973 energy crisis?

Although many Zambian economic troubles continue into the post-Cold War era from 1992 to the present, there have been marked increases in many sectors, and development seems to be on the rise. Much of this seems to be due to the advent of actors other than the World Bank and IMF.

From telecommunications to fuel, mining and transport, many new countries and international financial institutions have started investing in Zambian industries in the last two decades.

What remains to be seen is whether Zambia has gained more authority to negotiate with these actors in the post-Cold War era than it had when the majority of financial interactions were with the World Bank and IMF during the Cold War.

With the rise in Zambian economic activity and the move toward urbanization, is the country becoming more economically independent?

From my initial research, I determined that Zambia was either still dominated by the whims of investors and lenders in some sectors or that the evidence found was insufficient to indicate an improvement.

However, after actually stepping out of the library and traveling to Zambia, I have seen several indications that Zambia’s ability to dictate certain terms to investors has increased in the past 20 years. This evidence is by no means conclusive, but it is enough to bring hope to my previous pessimism.

What sparked your interest in Zambia’s political economy?

I began my research about a year ago while taking a class on African politics at The University of Texas at Austin under the guidance of Catherine Boone. In the past six months, I have detailed my research in a paper that addresses my more specific area of study in Zambia as well as my conclusions based on research in libraries and on the Internet.

Ben Weiss standing at the head of Victoria Falls.

I focused on whether the Zambian government has been able to gain negotiating power in investment and foreign aid proceedings due to the increase in international actors in Zambian economics since the Cold War’s end. I chose to examine the presence of competition to invest and give aid between the World Bank and China, as they are two major international actors in Zambia.

With this as my framework, I used case studies in the mining, telecommunications, health and banking sectors to look for the presence of competition to invest or give foreign aid.

What made you decide to conduct fieldwork in Zambia?

I decided that my research would be incomplete without actually traveling to Zambia to reflect first-hand on my conclusions. Thanks in part to the generous funding of the Senate of College Councils, I was able to make this a reality.

In spending about a month in Zambia, I came to realize that my conclusions were not necessarily wrong, but that the premises they were based upon were too limiting. I have come to understand that had I established different parameters, I would have reached a much more cautiously optimistic deduction. The international actors at play in Zambia are new enough that they will not appear in bulk or detail in library and archival records.

Since coming to Lusaka, it has become clear that the competition I am looking for is a result of a plethora of actors, rather than just the World Bank and China.

During the research phase, did you come across any surprising findings?

Only in traveling to this country could I have realized how truly diverse the number of investors in Zambia are. Several of these are older players like the World Bank, IMF and China who have made appearances since the 1970s and earlier.

However, there are now too many new players to list. A report published in 2011 called “Investing in Zambia” details a 686.1 percent increase in foreign direct investment between 2000 and 2009, which I believe can be attributed greatly to the increase in actors over the past two decades. This reality represents a lot of hope for the country. Zambia now has options, and with options come power.

The country has come a long way in a short time, and it still has a long way to go. But if being in this nation has taught me one thing, it is that Zambia is certainly starting to lay the groundwork for significant progress.

The deadline to apply for the Spring 2012 Undergraduate Research Grant is Friday, March 23, by 5 p.m. Please submit your application (sealed in a manila envelope) in person to Becky Carreon in the Senate of College Councils’ office in SAC 2.102.

Eligible applicants include students assisting a faculty member with a research project, as well as students conducting independent or partnered research. Applicants must be enrolled for 12 hours of coursework at The University of Texas at Austin and be considered an undergraduate student by the Office of the Registrar. The winner will receive a $1,000 prize from the Senate of College Councils to be used toward research.

Jeremi Suri, the Mack Brown Distinguished Chair for Leadership in Global Affairs at The University of Texas at Austin, is an expert on U.S. nation-building, modern international relations, contemporary foreign policy and protest and dissident movements.

The author of “Liberty’s Surest Guardian: American Nation-Building from the Founders to Obama,” Suri looks to America’s history to see both what it has to offer to failed states around the world and what the nation should avoid.

Suri is one of dozens of experts at the university who can speak to issues regarding the 2012 elections.

]]>http://www.utexas.edu/know/2012/01/18/suri_jeremi_election/feed/2The economy is the crux of November's electionshttp://www.utexas.edu/know/2010/10/08/brandl1/
http://www.utexas.edu/know/2010/10/08/brandl1/#commentsFri, 08 Oct 2010 21:09:11 +0000University Communicationshttp://www.utexas.edu/know/?p=14746Michael Brandl is a senior lecturer in economics and finance at the university’s McCombs School of Business. A recipient of the 2010 Regents’ Outstanding Teaching Award, Brandl is also an expert commentator who has written for publications such as CNN and has appeared on countless TV news programs discussing national and global economic issues. He is the author of the popular Macroeconomic Updates blog.

In the 1992 presidential election race the Clinton camp mocked President George H.W. Bush’s inability to understand his falling popularity with the memorable phrase “it’s the economy, stupid.” It is funny how history has a nasty way of repeating itself. In this fall’s election season that phrase could be repeated again and again. It helps to explain why voters on both the left and the right are mad.

Pundits on the right complain that a government “takeover” of the economy is under way while the economy falls apart. Meanwhile pundits on the left complain that “not enough” is being done to help the unemployed and the poor in our society. At the same time incumbents argue that the “Great Recession” would have been even worse if not for the policies they enacted during the financial crisis and thus they should be re-elected.

The political scientists tell us that voters often “vote their pocketbook” –- if the economy is doing well, it’s good for incumbents, but if the economy is not doing well, incumbents may be in very big trouble. Just ask George H.W. Bush how things turned out for him.

So, who has the “economic facts” on their side? The sad answer is no one. The pundits on the right have a grain of truth to their argument about an increased size of the U.S. federal budget, but this can hardly be correlated to a “takeover” of the economy. While our budget deficits grow, the British and Europeans are having serious, grown-up discussions on how to reduce the size of their deficits in a way that will not choke off economic growth.

The pundits on the left also have an once of truth in their argument when they point to the worsening economic plight of those Americans outside the richest 10 percent. But to simply throw more money at the problem is hardly a well thought out economic solution. Instead, the badly misaligned incentives within our economic policies should be addressed to ensure those in the middle and lower rungs of the economic ladder have the opportunity to work their way closer to the top.

And the incumbents do have a modicum of truth to their argument when they point out the TARP [Troubled Asset Relief Program] and stimulus packages were needed given the crisis we faced. But, that grossly overlooks the bigger problem of how we got into this mess in the first place and the fact that the current policies in the U.S. do nothing to prevent another major economic and financial blow-up in the future. If anything, the policies passed make a bigger economic crisis in the future even more likely.

So, in the end, regardless of partisan politics, the voters have a right to be mad. It is the economy.

Visit the mid-term elections blog series home page for a complete lineup of faculty experts’ analyses.

]]>http://www.utexas.edu/know/2010/10/08/brandl1/feed/0Energy economist in L.A. Timeshttp://www.utexas.edu/know/2008/06/30/foss-clipping/
http://www.utexas.edu/know/2008/06/30/foss-clipping/#commentsMon, 30 Jun 2008 13:57:49 +0000Tara Chandlerhttp://www.utexas.edu/know/?p=598Eight miles north of the maritime border with Mexico, in waters a mile and a half deep, Shell Oil Co. is constructing the most ambitious offshore oil platform ever attempted in the Gulf of Mexico. Companies working in U.S. waters wouldn’t have to worry about Mexico taking legal action if it were determined that Mexican crude was ending up in their wells. International law and commercial custom dictate that communal reservoirs be shared. But the U.S. has not ratified a key United Nations treaty on maritime law, which could complicate Mexico’s effort to pursue any complaint over pilfered crude. Nevertheless, oil companies don’t like surprises, said Michelle Foss, chief energy economist at the University of Texas at Austin’s Bureau of Economic Geology. “You’re not going to put a billion dollars at risk if . . . you might have to suspend operations because of an international dispute,” she said.